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The man in the white van was one of those given a much-needed boost after the Chancellor raised the level at which businesses must pay VAT.
The threshold was raised from £85,000 in turnover to £90,000, giving everyone from painters and decorators to florists and tea shop owners across the UK a shot in the arm.
This is the first increase in seven years and will benefit some 28,000 companies, according to the Treasury.
The freeze in recent years has forced some to raise prices to account for the additional tax burden, while others have actively avoided the threshold altogether, deliberately hampering its growth.
The plan to raise the threshold for small businesses by £5,000 will “cut taxes and help them grow”, Jeremy Hunt said in the Budget yesterday.
Business boost: The level at which businesses must pay VAT raised from £85,000 turnover to £90,000
“The Government recognizes that VAT can be a burden for some small businesses and will therefore increase the VAT registration threshold to £90,000,” the Treasury added.
The change will occur from April 1.
But some business leaders believe the plans do not go far enough and many expect a rise in turnover to £100,000.
Owen Burn, of wealth manager Evelyn Partners, warned: ‘Companies may choose to manage turnover to stay below the threshold. “It is unclear what level of growth this marginal increase will generate for those in and around the threshold.”
The plan was announced alongside a series of measures to help businesses, notably the Growth Guarantee Plan, which will run until the end of March 2026.
The scheme offers a 70 per cent government guarantee on loans to small and medium-sized businesses of up to £2m in Great Britain and £1m in Northern Ireland.
At the same time, Hunt also announced another cut to the self-employed’s National Insurance contributions, which will fall from 8p to 6p from April, and a commitment to expand total spending on leasing of plant and equipment. machinery.
However, companies were not impressed and called it “Business Running Budget.” Many wanted the issue of staff shortages to be addressed, as well as plans to improve worker training.
The Chancellor revealed a 2p cut to National Insurance to try to attract more people into the workplace, but others wanted Hunt to address issues surrounding the long-term sick.
Roger Barker, director of the Institute of Directors, said: “What is the Government’s plan to encourage the long-term ill to return to work?
“That is the main problem of all companies for which so far no one has an answer.”